Failing to plan is planning to fail, having a business plan is one of the most important documents when starting a business. A (business plan) is a summary of how a business owner, manager, or entrepreneur intends to organize an entrepreneurial endeavor and implement activities necessary and sufficient for a venture to succeed.
you could look at it as the roadmap for your business, it sets out where you want to go, your key objectives in the next two or three years, it shows you the plan on how to get there the strategies you’re going to implement to achieve your objectives and it also shows you your present state of the business so you can measure performance and make adjustments necessary to achieve your goals.
How To Write A Business Plan
Make no mistake, your business plan isn’t something you create and then put away in a drawer. It is a working document that you can always refer to and to make sure you’re going in the right direction and following the right path in your business, it also provides a great way to give other people an overview of your business and to demonstrate how you’re performing.
In this article, we’re going to give you an idea of how to write a business plan for your business, but before we dive in, you need to know that the plan is often not written in the same order as in the final document. For example, the executive summary will appear in the first section, but it is usually written last when everything else is done. We’ll come back to the executive summary at the end of our discussion.
1. Introduction and Company Overview
The first section of a business plan we’ll look at is the introduction and company overview. You will need to include the basic details of your business and this will include your business name, address, website address if you have one and your contact details.
You should also provide your legal status and whether you are operating as a sole trader, a partnership or a limited company. In this section of your business plan, you will also need to explain what your business is all about, what you want to achieve and how you plan to measure your success.
Make sure you describe the product or service you are offering and who you are selling it to, the key here is to keep your focus on the benefits people will get from your product or service rather than just the features of your offering.
You will also want to explain what are the things that make you different and what makes you stand out from your competitors, this is known as your unique selling proposition (USP).
2. Market and Competition
The next section in your business plan is about the market and competitor analysis, this is where you demonstrate that you’ve researched your market and understand the environment you’re working into.
You should be able to state who is your target market, what are their needs and preferences, how old are they, and their location.
You may want to include a past analysis here to show which market factors that are likely to have an impact on your business and a SWOT analysis – to show what is important to your business and also identify the strength, opportunities, weakness, and threats related to the business.
Also, make sure to include a competitive analysis that will show the research and information on your immediate competitors. Outline your main competitor’s strengths, weaknesses and the potential impact on your business. This section is very important, as it will explain how your business can gain market share by capitalizing on your competitor’s weaknesses.
3. Sales and Marketing Strategy
The next section of your business plan is your sales and marketing strategy, this aspect will focus on your target market, where your customers are and how you plan to promote your business and reach your customers.
Again, taking into account the differences you’ll also want to include details of your pricing strategy and a detailed sales forecast, you must be specific about what you want to achieve and include a timeline and budget.
It is important you explain how you’ll track results, measure your performance and if you don’t achieve the sales you’d hope for, explain what you plan to do to minimize the risk.
A key section of your business plan is operations, this is where you explain how you plan to conduct your business it will include information about your location premises and equipment and explains how you plan to make provision for a store and deliver your products and services.
You should also include an overview of your suppliers, your approach and how you deal with them as well as your distribution strategies this is also where you’ll include details of the staff you may employ, your systems and procedures and what information technology (IT) support you have.
If it is relevant you could also cover specific information about health and safety measures, equality and diversity, quality control and note any compliance requirements.
It is also useful to outline your future plans and explain how the way your business operates may change over time.
4. Financial Information
Now we have come to the financial section of writing a business plan, it is one of the most critical sections and also one that many people find quite daunting. For a start, it will be a good idea to ask your accountant or business advisor to help you out.
The aim is to demonstrate that the business has sufficient cash investment to cover its costs and make a profit, you’ll need to show a detailed month by month cash flow for the first year and a profit and loss statement for the two or three years.
Make sure both your sales forecasts and predicted expenses are as realistic as possible, again it is helpful to include your contingency plans for any “what if” situation. For example, what if sales are higher than expected how does that affect the figures? And what if sales are lower than expected what will happens next?
The final section is the appendix, this is where you put all the documents and evidence to support your business plan. This may be a market research information, any letters you have from potential customers or firm orders that you already have in the bag.
You could include references or examples of previous work price lists legal documents, policies, and procedures, job specifications for key members of your team and the market survey, examples of promotional and marketing material.
Make sure you cross-reference this information to the appropriate section of the business plan because you don’t want people to get confused.
So that’s all the vital information on how to write a business plan, now you’re in the right position to do the executive summary.
Your executive summary should be well presented clearly written, keep it brief and straightforward. It should provide an overview of the business and cover the most important points of your business plan.
Make sure you are positive because your goal here is to impress and persuade people towards your business, and it can be very useful to tailor this section to your audience.
For example, when presenting the business plan to your bank to secure a loan the executive summary should focus on how important that loan is to you and how it will help your business to succeed.
Once you have finished your executive summary your business plan is complete. Make sure you use it and keep it up to date, have it available in a format that everyone in the business can access. After all, it is the roadmap for your business and will always be a useful tool for you.